What does September hold for the Dow?

The chart below, courtesy of Chart of the Day, illustrates the Dow Jones Industrial Index’s average performance for each calendar month since 1950 (blue bars) and 1980 (gray bars) respectively. While the strongest upward movement in stocks has historically occurred during the November to January period, September has proven to be the most difficult month for stocks. It is interesting to note how since 1980 the average gain for September has remained negative despite the fact that most of this period included a strong bull market.

These results are consistent with one of my earlier studies showing that the best time to be invested in equities is the six months from early November to the end of April, while the “bad” periods normally occur over the six months from May to October.

Let’s see whether September 2007 stacks up in accordance with the historical picture.

1 comment to What does September hold for the Dow?

My proprietary, econometric indicators suggest that it is possible that new highs are in prospect. Important cycle dates are Thursday, 6 Sept. and Wednesday, 19 Sept. If time and price are in synch, SPX could sell at 1540 on the 6th. The cyclic movement encompassing the reverse head and shoulders formation, which I believe is presently under construction, will be finished on the 19th.

My very flawed crystal ball indicates a significant point of inflection somewhere between 11-13 October. However, flawed crystal balls are a slight improvement over chicken entrails and oily smoke.

I SHUDDER USED A RUDDER!
by Home N. Gutter

I always shudder
When I think about
Trading the markets
Without a rudder!